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| The Tax Publishers2019 TaxPub(DT) 2340 (Del-Trib) INCOME TAX ACT, 1961
Section 92B
Delhi High Court in Sony Ericsion India (P) Ltd. v. CIT (2015) 55 Taxmann.com 240 : 2015 TaxPub(DT) 1653 categorically held that bright line test is not an appropriate yardstick for determining existence of an international transaction for calculating arm's length price, accordingly, no further interference was called for. Issue was set aside to TPO to pass fresh order considering decision of Supreme Court.
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Transfer pricing - International transactions - AMP expenses - Application of Bright Line test
Assessee, a subsidiary of Whirlpool USA, was engaged in production, sale and distribution of Whirlpool appliances. It incurred advertising, marketing and promotional (AMP) expenses. TPO treated incurrence of AMP expenses as international transaction by applying bright line test and accordingly. TPO proposed adjustment on account of AMP expenses. Held: Delhi High Court in Sony Ericsion India (P) Ltd. v. CIT (2015) 55 Taxmann.com 240 : 2015 TaxPub(DT) 1653 categorically held that bright line test is not an appropriate yardstick for determining existence of an international transaction for calculating arm's length price, accordingly, no further interference was called for. Issue was set aside to TPO to pass fresh order considering decision of Supreme Court.
Followed:Sony Ericsson Mobile Communication India (P) Ltd. & Ors. v. CIT (2015) 55 Taxmann.com 240 (Del) : 2015 TaxPub(DT) 1653 (Del-HC).
REFERRED : LG. Electronics India P. Ltd. v. Asstt. CIT (2013) 29 Taxmann.com 300 (Del-Trib) : 2013 TaxPub(DT) 0634 (Del-Trib).
FAVOUR : In assessee's favour (by way of remand).
A.Y. :
INCOME TAX ACT, 1961
Section 2
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